Building a seven-figure portfolio isn’t as hard as you may think. In fact, some say that “millionaire is the new middle class.”
To illustrate just how attainable the dream of becoming a millionaire is, personal finance site NerdWallet created a chart showing how much money you need to set aside each month in order to have $1 million saved by the time you’re 67.
The chart assumes you’re starting with zero dollars invested. It also assumes a six percent average annual investment return.
The amount you have to save depends heavily on how early you start. NerdWallet compared the savings amount to someone who starts at the age of 23, 30, 35 and 40. As the chart shows, the sooner you start putting your money to work, the less you’ll have to save each month, thanks to the power of compound interest.
Here’s how much you have to save each month if you start at age:
23: $415 (about $14 a day)
30: $651 (about $22 a day)
35: $912 (about $30 a day)
40: $1,300 (about $43 a day)
Ready to put your money to work? The simplest starting point is to invest in your employer’s 401(k) plan, a tax-advantaged retirement savings account. Next, consider alternate retirement savings accounts, such as a Roth IRA, traditional IRA and/or a health savings account.